As interest rates hit historic lows, homeowners have been taking advantage of the opportunity by refinancing. However, for some with less than perfect credit, refinancing has been out of reach, especially for those hit by financial hardships.

Mark Calabria, former director of the Federal Housing Finance Agency, stated that while there was a spike in refinances last year, "more than 2 million low-income families did not take advantage of the record low mortgage rates by refinancing."

Lower.com has solved this by offering a mortgage relief program to help homeowners lower their monthly mortgage payment, even if they have struggled to get approved for a refi in the past.

We've broken down all the details on the RefiNow program and how to help you determine if you qualify for mortgage relief.

Take the first step to getting access to more savings without all the red tape and added stress. 

What is Mortgage Relief?

While refinancing a mortgage is often a simple way to make homeownership more affordable, the borrowers who could benefit the most sometimes struggle to take advantage of the lower monthly home payments and overall savings.

For these homeowners, mortgage relief programs can make refinancing within reach. Once borrowers qualify for a refinancing program, their monthly payments will become more affordable, preventing mortgage delinquencies and the worst-case scenario of foreclosures. 

Imagine getting kicked out of your own home after all the payments you’ve already made. This is what we’ll help you avoid.

Common Mortgage Relief Programs

• Loan Modifications: The goal of a mortgage loan modification is to lower your interest rate, extend the life of the loan, or lower the loan principal.  
• Hardest Hit Fund (HHF) Programs: Administered by the US Treasury, HHF offers aid to states greatly impacted by an economic crisis. Local agencies in each state will help homeowners affected in various ways, from mortgage payment or transactional assistance to principal reduction. 
• Home Affordable Foreclosure Alternatives (HAFA) Program: For borrowers unable to qualify for a loan modification and avoid foreclosure, HAFA provides protection and financial assistance to homeowners choosing to do a Short Sale or Deed-in-Lieu of Foreclosure. 
• HomeReady: A mortgage program designed to help lenders serve credit-worthy, low-income borrowers with confidence. First-time or repeat homebuyers can enjoy a low down payment when purchasing or refinancing. 

Qualifications for Mortgage Relief Program

When applying for a mortgage relief program, it is not only about the homeowner's qualifications. Sure, the borrower must meet certain qualifications before getting approved for a mortgage relief program, but there are additional factors to consider, such as: 

• Home Value: If home values fall, it can affect homeowners' ability to refinance for a lower rate and payment. The loan-to-value (LTV) ratio compares the amount you owe on your home loan to your home's current value. While 97% is the industry standard for the maximum LTV for a conventional refinance, mortgage relief programs have a minimum LTV ratio that your loan must be at or above. 

How RefiNow Can Help You

RefiNow is a government mortgage relief program helping homeowners with less-than-perfect credit qualify for refinancing and making homeownership more sustainable. However, the home loan must be backed by Fannie Mae. The main goal for ReFiNow is helping families with a Fannie Mae backed loan affected by the COVID-19 pandemic. If you are unsure if your mortgage loan is owned by Fannie Mae, you can check at: https://www.knowyouroptions.com/loanlookup

RefiNow is the ideal refinance product for homeowners with limited funds for up-front costs and who have high debt-to-income (DTI) ratios.

Whether you choose to use the monthly savings by refinancing your home for groceries, kids' school or sports supplies, or to pay off debt, the choice is up to you as you can finally relax with the financial burden lifted.  

Basic Qualifications for RefiNow

• Your current home loan is a Fannie Mae owned mortgage
• You live in the single-family home as your primary residence 
• You've paid on time over the last six months and have only been late once in the past year
• You have a minimum credit score of 620
• Your DTI (debt-to-income) is 65% or below
• Your current income is at or below 80% of your area's median income
• Your mortgage has a loan-to-value ratio of up to 97%

If you answered yes to any of the above, contact us to see how much you could save by qualifying for RefiNow. Even if you're over or under qualified for this particular program, we would enjoy the opportunity to help you save on your home, whether with another refinancing product or in other ways. 

Benefits of RefiNow for Qualifying Homeowners

• Enjoy an affordable refinancing option
• Minimum up-front costs for borrowers, including an appraisal waiver or $500 credit
• Take advantage of the historically low interest rates to reduce your monthly housing payment by at least $50
• New opportunities for borrowers with a debt-to-income (DTI) up to 65%

Fannie Mae Backed Home Loans

Fannie Mae is a government-sponsored enterprise (GSE) created by Congress in 1938. Fannie Mae participates in the secondary mortgage market by purchasing and guaranteeing mortgages issued by financial institutions and forming mortgage-backed securities with them. However, it is important to note that Fannie Mae does not originate mortgage loans. Therefore, if you have a Fannie Mae backed home loan, it doesn’t mean that Fannie Mae is your lender (*cough* but Lower.com could be! *cough*).

To obtain a home loan backed by Fannie Mae, including a refinance loan, you’ll have to go through an approved lender like Lower.com. Approved mortgage lenders have to meet eligibility and underwriting criteria as well as comply with the Statement on Subprime Lending issued by the federal government. 

For first-time homebuyers and those who haven't bought a home in several years, you may be wondering the difference between a Fannie Mae backed loan vs. a conventional loan.

A conventional loan is any loan originated by a private entity and not subsidized by a government agency like FHA, VA, or USDA. A Fannie Mae backed loan is one that FNMA has securitized, or holds on its books. Not all conventional loans can be held by Fannie Mae, but all the loans Fannie Mae backs are conventional. Make sense?

As the housing market becomes more competitive, refinancing may be your best option if you are happy with your current home and want to get a lower rate to help reduce your monthly expenses. While working families may believe refinancing is out of their reach, RefiNow from Lower helps them gain access to monthly savings, allowing them to invest more in their family without the financial stress of a high home payment. Contact us to find out how RefiNow from Lower can make refinancing your home easier than ever before.